D.C. Mun. Regs. tit. 18, r. 18-437

Current through Register Vol. 71, No. 35, August 30, 2024

Rule 18-437 - THIRD PARTY TITLING AND REGISTRATION

437.1

The Department of Motor Vehicles ("Department") may certify third parties to perform motor vehicle title and registration functions pertaining to new vehicle sales in accordance with the laws of the District of Columbia.

437.2

A third party shall not engage in any activity pursuant to this chapter unless the Department issues a certificate allowing the party to engage in the business and the certificate is in good standing.

437.3

The Department shall supervise and regulate all parties required by this section to obtain a certificate, including successful completion of a training course by a third party or designated employees or agents of a third party who will perform the functions set forth in § 437.1.

437.4

A third party shall apply for certification pursuant to this chapter in writing on a form prescribed by the Department. The third party shall include with the application all documents and fees as determined by the Department.

437.5

The application shall be under oath and shall contain, at a minimum:

(a) The name and residence address of the applicant; if the applicant is a partnership, the name and residence address of each partner; or if the applicant is a corporation, the name and residence address of each principal officer and any stockholder holding more than ten percent (10 %) of the corporation;

(b) The name and residence address of any individual who will be performing the functions set forth in § 437.1.

(c) The principal place of business of the applicant; and

(d) The established place of business at or from which the business is to be conducted.

437.6

The Director may add new application requirements as he or she reasonably determines to be necessary.

437.7

A third party who applies for certification pursuant to this section shall submit with the application a bond in a form to be approved by the Department and in an amount of at least twenty-five thousand ($25,000) dollars.

(a) A surety company authorized to transact business in the jurisdiction where the third party is located shall execute the bond with the applicant as principal obligor on the bond and the District of Columbia as obligee. The surety company shall notify the Department by certified or registered mail if the bond is cancelled. The bond shall be conditioned on the applicant faithfully complying with all of the provisions of law. The bond shall be not be cancellable and shall remain in effect for forty-five (45) days after the Department's termination of a third party's certification to perform title and registration functions or the third party voluntarily gives up its certificate to perform title and registration functions.

(b) The bond inures to the benefit of any person who suffers loss because of any of the following:

(1) Nonpayment of any fee or tax paid to the third party by that person;

(2) Insolvency, bankruptcy or discontinuance of business; or

(3) Failure of the third party to comply with its duties pursuant to this section.

437.8

The bond requirement of this section does not apply to a Department or Agency of the District of Columbia.

437.9

An applicant and each partner, officer, director, agent, or stockholder owning ten percent or more of a corporation seeking certification pursuant to this chapter shall provide a full set of fingerprints and a fee as determined by the Department in order to conduct a criminal background investigation.

437.10

If the third party adds a partner, officer, director, agent, or stockholder who owns ten percent or more of the corporation and who was not included in the criminal background investigation on a prior application, the third party shall notify the Department within ten days of the change and provide a full set of fingerprints for the purpose of a criminal background check, along with a fee as determined by the Department in order to conduct a criminal background investigation.

437.11

The criminal background investigation does not apply to a Department or Agency of the District of Columbia.

437.12

The Department shall deny an application for a certificate if:

(a) There is a false statement or misrepresentation in the application;

(b) A third party, partner, officer, director, agent, or stockholder owning ten percent (10%) or more of a corporation seeking certification has been convicted, as defined in § 9901 of this title, of a felony in any state, territory or possession of the United States or any foreign country, regardless of whether civil rights have been restored or been convicted, as defined in § 9901 of this title, of a misdemeanor involving dishonesty, false statement, perjury, or moral turpitude;

(c) The application is not complete; or

(d) The bond is not submitted with the application.

437.13

If an application for certification is denied, the Department shall advise the applicant in writing by personal service or certified or registered mail of the denial and the grounds for denial.

437.14

Once a third party is certified, the Department shall furnish it the necessary title and registration documents, license plates, and registration, new vehicle inspection and parking stickers.

437.15

A certified third party shall notify the Department within one (1) business day by email or facsimile, as well as by certified or registered mail when an individual listed pursuant to § 437.5(b) is no longer performing the functions set forth in § 437.1.

437.16

Subsequent to certification, any individual not listed in § 437.5(b) must successfully complete a Department training course prior to performing the functions set forth in § 437.1.

437.17

A certified third party shall submit to the Department all statutorily and regulatory prescribed title and registration fees it collects as well as any other documentation or information pertaining to the titling and registration in the manner prescribed by the Department.

437.18

Subsequent to issuance of a certification, the Department shall:

(a) Conduct investigations it deems necessary;

(b) Conduct audits and require that the third party submit to it, at such intervals as it determines an audit by the Department or a certified public accountant licensed by the jurisdiction where the third party is located;

(c) Make on-site inspections during regular business hours and at such locations as it deems appropriate to determine compliance by the third party with this section; and

(d) Require that a certified third party or employees or agents of a certified third party shall take part in all Department required continuing training programs.

437.19

A third party who is certified pursuant to this section shall maintain records for three (3) years. Those records shall include:

(a) Collection of and disbursement of excise taxes;

(b) Collection of and disbursement of titling and registration fees;

(c) Collection and disbursement of any other fees collected for the Department; and

(d) Documentation pertaining to the distribution of the items described in § 437.3.

437.20

The records noted in § 437.18 shall identify the:

(a) Customer's file number, if any;

(b) Customer's name and address;

(c) Vehicle's make, year, vehicle identification number; and

(d) Type of transaction.

437.21

The certified third party shall safeguard all inventory provided to it by the Department and shall notify the Department within twenty-four (24) hours if inventory is lost or stolen.

437.22

The Department shall revoke the certification of a third party granted pursuant to this section for any of the following reasons:

(a) There is a false statement or misrepresentation in the application;

(b) Violation of this section;

(c) Allowing an unauthorized person to issue a title or registration or collect fees required to be paid to the Department under this section;

(d) Failure to maintain the bond required by this section;

(e) A third party, partner, officer, director, agent, or stockholder owning ten percent or more of a corporation seeking certification having been convicted, as defined in § 9901 of this title, of a felony in any state, territory or possession of the United States or any foreign country, regardless of whether civil rights have been restored or been convicted, as defined in § 9901 of this title, of a misdemeanor involving dishonesty, false statement, perjury, or moral turpitude;

(f) Insolvency, bankruptcy or discontinuance of business; or

(g) Failure to protect personal information as set forth in 18 U.S.C. §§ 2721et seq. or D.C. Official Code § 50-1401.01 b.

437.23

The Department shall advise the third party in writing by personal service or certified or registered mail of the revocation of the certification.

437.24

A third party whose application is denied or whose certification is revoked may petition the Department in writing within thirty (30) days of the date of the letter for a hearing before the Department's Vehicle Services Administrator. There shall be no right of appeal from the Administrator's decision.

D.C. Mun. Regs. tit. 18, r. 18-437

Final Rulemaking published at 62 DCR 2548 (2/27/2015).